Bitcoin Faces FOMC Test as Past Meetings Trigger Sharp Selloffs

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Bitcoin remains rangebound below $90,000, hovering near one-month lows, as investors remain cautious ahead of the Federal Reserve’s policy meeting.

Market focus has shifted to the Federal Reserve’s two-day meeting, which concludes on Wednesday, with policymakers expected to keep interest rates unchanged.

While a pause is largely priced in, traders are looking closely at the Fed’s statement and Chair Jerome Powell’s press conference for clues on the timing of potential rate cuts and the central bank’s inflation outlook.

Any shift in Powell’s tone could influence broader risk sentiment and liquidity.

How Bitcoin ($BTC) Is Likely to React to the FOMC Meeting: Lessons From Past Cycles

The Federal Open Market Committee (FOMC) plays a critical role in shaping global financial markets by setting U.S. monetary policy.

With eight scheduled meetings each year, its decisions on interest rates directly influence liquidity, risk appetite, and capital flows across assets, including Bitcoin.

As markets look ahead to the conclusion of the first FOMC meeting on Wednesday, expectations for a January rate cut remain extremely low at just 2.8%. This suggests that monetary easing is unlikely in the near term, keeping financial conditions relatively tight.

Historical data from 2025 offers important context for how Bitcoin tends to react around these events. Out of eight FOMC meetings, Bitcoin’s price declined after seven, with only one producing a short-lived rally.

The drawdowns were often sharp, ranging from –6% to –29%, while BTC only rallied in May, with a +15% move before momentum faded.

HOW BITCOIN $BTC WILL REACT TO FOMC MEETING, LAST TIME IT DROPPED BY -9%

The Federal Open Market Committee (FOMC) is responsible for setting US monetary policy, meeting eight times a year to decide interest rates that shape liquidity conditions across global markets.

Looking… pic.twitter.com/YBVr0fBXxn

— Ali Charts (@alicharts) January 27, 2026

A key takeaway from the historical data is that FOMC weeks have consistently brought heightened volatility and a risk of a BTC price drop. While markets often rally ahead of meetings on hopes of dovish signals, the post-announcement reaction has leaned bearish in most cases.